Each year, thousands of young people leave school and face their first real decision about their future in an economy increasingly shaped by digital technology and AI. For some, the pathway into further education or employment is clear. For others, the next step is far from certain.
Across the UK, the scale of the challenge is significant. Around 957,000 young people aged 16–24 are not in education, employment or training (NEET), representing roughly 12.8% of that age group. While this figure includes young adults up to age 24, disengagement often begins much earlier. Participation data suggests that around 7–8% of 16–17-year-olds in England are not in education or training, despite expectations that young people remain engaged until the age of 18.
The issue is particularly acute and visible in the North of England, where local authorities report hundreds of young people each year as NEET or with unknown destinations.
For many young people, particularly those who struggle in purely academic environments, the final years of school can begin to feel disconnected from the opportunities that exist beyond it. When learning appears detached from the real world, and the purpose behind it is unclear, disengagement becomes an understandable response.
Schools recognise this risk, and many use predictive tools such as the Risk of NEET Indicator (RONI) to identify students who may struggle to transition successfully after leaving school. However, identifying the risk does not solve the underlying issue. Too many young people still reach the end of compulsory education without a clear sense of how their skills could translate into meaningful work.
The Critical Transition at 16
The point at which young people leave school is often where these challenges become most visible. For those who do not feel motivated by traditional academic routes, the connection between education and employment can appear unclear.
When that connection is missing, the consequences can be long-lasting. Young people who struggle to find direction at 16 often face greater barriers later when trying to enter employment or re-engage with education.
The issue is not simply participation in education, but whether young people can see how what they are learning leads to genuine opportunity.
A Generation Already Fluent in the AI Economy
As we debate how to reduce youth disengagement, another transformation is taking place across the economy.
AI and digital technologies are reshaping how organisations operate, communicate and compete. Businesses across every sector are exploring how AI tools can improve productivity, enhance customer experience and support new ways of working.
Yet the generation most comfortable in this environment is already here. Today’s teenagers are not just digital natives; they are increasingly AI natives, growing up with generative AI and digital platforms as part of everyday life. Many are already experimenting with these technologies long before entering the workforce. Recent research suggests that more than 60% of Gen Z have already used these tools for learning, creativity and practical tasks.
At the same time, employers are still trying to build the skills and expertise needed to adopt these technologies effectively. A government survey on the AI labour market found that 97% of organisations report at least one AI-related skills gap.
Research from Gartner reinforces the scale of this challenge, showing that organisations with stronger AI leadership and strategy are significantly more likely to achieve measurable business outcomes such as productivity gains or revenue growth.
The contrast is striking. Businesses are searching for AI expertise, yet many digitally confident young people struggle to see how their skills translate into meaningful work.
The young people we worry about becoming NEET may also be the ones best equipped to help businesses adapt to the AI economy.
Aligning Education with the Real Economy
The UK government’s devolution plans for 2026, driven by the English Devolution and Community Empowerment Bill, aim to transfer greater control of skills funding to combined authorities, giving mayors more influence over 16–19 education and training pathways.
Recent government announcements also reflect the urgency of the issue. A new £1 billion youth employment drive aims to unlock 200,000 jobs and apprenticeships for young people, alongside incentives for employers to recruit young workers and expand apprenticeship opportunities.
These initiatives recognise that stronger pathways into employment are essential if the UK is to reduce youth disengagement while meeting the economy’s growing skills needs.
The recent launch of a Level 4 AI and Automation Practitioner apprenticeship by Skills England shows how quickly demand for advanced AI skills is growing. The challenge now is making sure young people are ready to step into these roles earlier, not years after they leave school.
To prevent and break the NEET crisis while simultaneously future-proofing regional economies, this influence needs to span the full 11–19 education journey and be supported by a more integrated education and skills system.
Across Greater Manchester, this shift is already visible through closer alignment between schools, employers and regional programmes. This includes Mayor Andy Burnham’s Greater Manchester Baccalaureate (MBacc) and the newly announced TechFirst initiative from the Department for Science, Innovation and Technology (DSIT). These approaches are introducing students to digital and AI-related career pathways during Key Stage 4, helping connect classroom learning more directly with emerging opportunities in the regional economy.
Building the Pathway Earlier
If the UK is serious about reducing disengagement among young people while meeting the needs of a digital and AI economy, then pathways into work need to begin earlier.
This means moving beyond a model where young people are expected to make decisions at 16 without a clear understanding of how their skills connect to real roles. Instead, schools, employers and training providers need to work together to create structured, visible pathways from education into employment during Key Stage 4.
At its core, this is about relevance. Young people, particularly those at risk of becoming NEET, are far more likely to stay engaged when they can see how what they are learning applies to the real world. This requires earlier exposure to digital and AI-related roles, including opportunities to work on significant projects, experience with AI tools and the development of critical skills, while engaging directly with employers.
This approach also changes the nature of work experience. Short placements with limited relevance rarely provide lasting value. Instead, live business projects, where young people can contribute to real tasks and challenges, can help them understand how their skills translate into impact.
For employers, this creates an opportunity to see their potential and develop talent earlier, rather than waiting until skills gaps become critical.
Some regions are already beginning to move in this direction, with programmes that connect schools, employers and digital pathways more closely during the later years of secondary education. These approaches demonstrate how earlier engagement can help young people build confidence, develop relevant skills and transition more smoothly into apprenticeships and employment.
The opportunity now is to scale this thinking more widely. That means combined authorities, employers and training providers working together to design pathways that start earlier, reflect real workforce needs and give young people a clear route into meaningful work.
From Social Value to Business Value
For this model to succeed, the conversation around youth employment also needs to evolve.
Too often, employing young people is framed primarily as a social responsibility. While social mobility remains critically important, the relationship between employers and young people must also be grounded in business value.
A digitally fluent 16-year-old entering the workforce today can bring capabilities that many organisations are still trying to develop internally. Whether creating digital content, experimenting with AI tools or understanding online audiences, these skills can contribute directly to productivity and innovation.
Young people should not simply be seen as future talent. In many cases, they can contribute from day one.
A Generational Opportunity
The UK is currently facing two challenges at once: the number of young people who struggle to find meaningful pathways after leaving school, and the growing demand for digital and AI capability across the economy.
Seen separately, both problems appear difficult to solve. But together, they reveal a significant opportunity.
If we connect education more closely with the realities of the modern economy, introduce digital pathways earlier and give employers the chance to nurture emerging talent, the transition at 16 can become a moment of momentum rather than uncertainty.
The talent already exists. The real challenge is having an economic, education and skills system capable of unlocking it.
By Mo Isap OBE, CEO of the IN4 Group
